The Ministry of Economy of Ukraine outlined the prospects and factors for economic growth this year and next, considering the explosion of the Kakhovka hydroelectric power plant and Russia's withdrawal from the grain deal. The Ministry of Economy said this to Ukrinform.
"We are now seeing a recovery in economic growth after significant losses. The economy continues to successfully adapt to the current challenges of Russia's war. We expect this trend to continue in the future," the ministry commented.
They reminded that Ukrainian economy has shown a steady upward trend year to date. At that time, the Ministry of Economy predicted that GDP would grow by 3.2% this year. However, due to the Russians' blowing up of the Kakhovka dam, analysts downgraded the forecast to 2.8%.
But as it turned out, they were in a hurry. Despite Russia's withdrawal from the grain deal and attacks on the port infrastructure of Odesa region and the Danube, according to updated calculations by the Ministry of Economy, GDP growth this year will be about 3.2%, as forecasted at the beginning of the year.
"Thus, according to the results of the first half of the year, GDP growth is estimated at 2.7%. By the end of the year, we expect to reach a growth trajectory of 3.2%, which was once the basis for budget calculations for 2023. However, given the speed and efficiency of business and households' adaptation to the new business environment amid constant challenges and other favorable conditions, we allow for higher GDP growth. But the war is ongoing, so the risks remain high," the Ministry of Economy comments.
According to the ministry, GDP growth is expected to accelerate in 2024. Currently, as part of the 2024 budget process, a GDP growth forecast of about 5% is being considered. This will happen if the war ends by the middle of the year, migrants gradually return home, ports reopen after liberation and demining, and recovery begins under the influence of the government's measures, active reform, and reconstruction of Ukraine with the help of partner countries and international organizations, as well as investment inflows amid effective reforms.
At the same time, the country's economic recovery will take place in the context of macroeconomic stability and the mitigation of security risks in close cooperation with international partners, including the EU, G7, and NATO.
As reported, according to the Ministry of Economy, the GDP decline in 2022 was 29.2%.
